Chapter 3, The Franchising Derby Summary and Analysis

McDonald's is successful and dominant in the fast food business without creating fast-food franchising or franchising generally. Kroc forms the McDonald's System on March 2nd, 1955, and is only one of a dozen or so entrepreneurs pursuing the idea. Franchising comes long before that, soon after the Civil War, in fact, with sewing machines. Food franchising predates the automobile.

Food service franchising comes later, in the mid-1940s, particularly with Dairy Queen and Big Boy. However, Dairy Queens are small and focused, whereas Big Boy's are enormous and full-service. Kroc founds a franchise in between. The author then tells stories of other fast-food franchise origins, such as KFC. Many of the founders have degrees from the same school of administration. When Kroc starts McDonald's, however, things take off like they never have before.